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Latam's Local Brands' Business Growth. Mexico's Grupo Bimbo Makes Impression; Coca-Cola No. 1

Latam's Local Brands' Business Growth. Mexico's Grupo Bimbo Makes Impression; Coca-Cola No. 1

Posted by Juan Gavasa on May 17, 2014

Local brands are proving to be popular across Latin America in comparison to global brands.According to Kantar Worldpanel, last year saw a 1.5 percent growth among local brands in the region. In comparison to global brands, it grew by 0.7 percentage points within Latin America. The percentage growth in Latin America has largely been attributed to Argentina, Brazil, Ecuador, and Venezuela.

The top brand in Latin America is Coca-Cola for the second consecutive year. The beverage companyhas a 90 percent market penetration in the region, which is the largest for Coca-Cola in comparison to other regions. The average Latin American consumer has reportedly purchased a Coca-Cola product at least 32 times per year.

Coca-Cola's growth in 2013 was an increase of four percentage points than 2012.

The second most popular brand was Colgate. Despite Colgate achieving a higher penetration of 91.1 percent compared to Coca-Cola, the company's growth, per Kantar Worldpanel's figures, fell by three percentage points. A consumer's frequency of purchasing Colgate products was nine times per year.

While local brands saw growth in Latin America, only one company based within the region ranked the top 10. Mexico's Grupo Bimbo entered at No. 3 with a 31.9 percent penetration in the region, which is the lowest among the top 10 companies. Grupo Bimbo's brand is the most purchased food brand in Latin America and has maintained no growth or decline in 2013. The frequency of purchasing Grupo Bimbo's products were 22 times per year, the second highest behind Coca-Cola.

While Grupo Bimbo was the most purchased food in the region, beverages were the fastest-growing sector courtesy of carbonated soft drinks and RTD juice and tea. Pepsi, which ranked seventh in the top 10 Most Chosen Brands in Latin America, was the fastest growing global beverage brand in the region with 14 percent growth compared to 2012. Pepsi delivered strong numbers in Chile, Colombia, Ecuador, and Mexico. Pepsi's market penetration was 45.6 percent in the region.

When it comes to home care products, the local brands proved popular due to lower price options. Latin America's local homecare rankings include Ypê in Brazil, Bolivar in Peru, Nova in Chile, Las Llaves in Venezuela, and AS in Colombia.

"The Latin America ranking reveals a picture of local strength," said Kantar Worldpanel's Latin America Regional Director Marcela Botana. "It is local brands that are winning at the moment of truth and winning space in the baskets and homes of consumers in Latin America. Despite the fact that local brands are gaining reach faster than global brands, it is interesting to see that there are a handful of global brands which are excelling."

According to Botana, the local brands are "masters" at promoting their brands from resolving practical needs and making life easier, all while conveying the "significance" to consumer's lives even after consumption.

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